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It is not the case that Rational agents update beliefs about opponent types via Bayesian inference when observed actions deviate from equilibrium predictions.
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Reasons For
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Reason for
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1.
Humans have severe cognitive limitations and systematic biases that prevent Bayesian updating in practice, even when rational.
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2.
Multiple equilibria and model uncertainty mean agents lack clear prior beliefs about opponent types needed for Bayesian updating.
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3.
Actions deviating from equilibrium may reflect payoff uncertainty, mistakes, or non-strategic motivations rather than opponent type.
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Reasons Against
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Reason against
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1.
Bayesian inference is the mathematically optimal method for updating beliefs given new evidence under uncertainty.
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2.
Observed deviations from equilibrium predictions provide genuine information about opponent type that rational agents should incorporate.
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3.
Agents who update beliefs via Bayesian methods outperform those using ad-hoc or non-rational updating rules in strategic environments.
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